As a leading provider of Real Estate Finance Qualification Services, we take pride in offering the best and Fastest Pre-Qualification. We are dedicated to serving the needs of our customers each and every day. We have worked hard for years to find you the perfect lender, with the best rates, and the least restrictions, or the one that will give you the YES!! Let the banks fight for your business.
New 2018 Loan Packages for Home Renovation, New Construction as well as Investments!
Homestyle Loan = A renovation loan such as an FHA 203(k) HomeStyle® loan lets you purchase or refinance and rehabilitate a property with one loan closing. The projected rehabilitation costs are held in an escrow account and disbursed as work is completed and inspected. The loan amount is based on the lower of the projected market value following repairs or purchase price plus renovation costs.* We have a great bank that will loan up to 95% of the New Appraisal Value of the Home after Renovations! This means less money out of your pocket and the ability to rehab the perfect home in the perfect neighborhood all in the same loan! (typically you will need higher credit scores for this loan 700+)
Dreambuilder Loan = 100% Financing for New Construction and Land! Must finish construction within 2 years. Purchase your lot with no money down! All in 1 sale, 1 closing, 1 package. Easy as can be. The loan is for the land and the home to be built! (typically you will need a higher credit score for this loan 700+)
Investor Loans = New Product specializing in investment property, this loan will loan up to 90% of the appraised value of the home to be purchased! If your good at finding foreclosures and want to get an awesome deal with extra cash to help! This special loan package is 90% of the appraisal value, not the sales price. So if you have a contract on a foreclosure home for 50k and it appraises for 80k then the bank can loan you 72k! Which will give you an additional 22k to invest back into the home or do other investment projects!
FHA Loans (Federal Housing Administration)
FHA loans are fell out of grace for a few years, but since 2005 have rebounded! It's an institution that has been around for a long time, since June 27, 1934. The Department of Housing & Urban Development folded the Federal Housing Administration (FHA) under its umbrella in 1965.
FHA loans began to lose favor in the late 1990s, when home values began to inch upwards, surpassing FHA mortgage limits, and sellers balked at FHA's stringent appraisal guidelines.
How FHA Loans Work
Now, FHA does not make loans or guarantee loans. It insures loans. The insurance removes or minimizes the default risk lenders face when buyers put down less than 20 percent. Without further approval from FHA, its approved lenders are authorized to:
- Take loan applications
- Process loan applications
- Underwrite and close the loan
FHA Mortgage Limits
My parents bought our first home in 1955 for $9,000 with an FHA loan. It's almost inconceivable to think of a home costing that today. As a result, FHA periodically changes its mortgage limits. As of January 1, 2009, the maximum mortgage limit in high-cost areas is 115% of local median prices, not to exceed $625,500. The maximum conforming loan limit is $417,000 for single-family residences nationwide. Your area could support a lower mortgage limit. Here is how to find your FHA mortgage limit.
FHA Loans Allow a Blemished Credit History
If your credit is less than perfect, FHA might be the loan for you. You may qualify for an FHA loan even though you have had financial problems.
Rural Development Loans (RD Loans)
USDA Rural Development Single Family Housing Guaranteed Loan Program
Guaranteed Loans Offer Affordable Financing To Rural Homebuyers.
The mission of USDA Rural Development’s Single Family Housing Guaranteed Loan Program is to assist low to moderate income rural homebuyers achieve their dream of homeownership!
Rural Development partners with approved local lenders to extend 100% financing opportunities to eligible rural individuals and families for the purchase of safe and sanitary dwellings. Guaranteed loans have assisted thousands of homeowners to purchase a home with affordable interest rates and loan terms.
Applicants must purchase a home within the eligible rural areas, and have a household income that does not exceed the established limits where the home is located. Additional Guaranteed Loan Features include but are not limited to:
- 100% financing, no down payment is required. The loan amount may not exceed 100% of the appraised value, plus the guarantee fee may be included.
- Guarantee Fee applies: may be rolled into the loan amount.
- Flexible credit guidelines. Non-traditional credit histories may be accepted.
- Fixed 30 year interest rates apply. Lenders and applicants agree upon interest rate.
- Qualifying ratios are 29% for housing costs and 41% for total debt. Lenders may request an exception to exceed these ratios when strong compensating factors are identified.
- No maximum purchase price. Qualifying ratios and the applicant’s stable and dependable income will determine home affordability.
- Eligible property types include existing homes, new construction, modular homes, Planned Unit Developments (PUD’s), eligible condominiums and new manufactured homes.
- Eligible closing costs and lender fees may be included in the loan or paid by the applicant.
- Gift/Grant Funds/Mortgage Credit Certificates (MCC’s)/Seller Concessions are allowed.
- Eligible repairs and improvements may be included in the loan.
- Applicants apply with an approved lender of their choice.
- Not limited to first time homebuyers.
Congress created the VA Loan Guaranty Program in 1944 to help returning service members achieve the dream of homeownership. Since then, the Department of Veterans Affairs has helped more than 18 million military members purchase homes.
What is a VA Loan? A VA loan is perhaps the most powerful and flexible lending option on the market today. Rather than issue loans, the VA instead pledges to repay about a quarter of every loan it guarantees in the unlikely event the borrower defaults. That guarantee gives VA-approved lenders greater protection when lending to military borrowers and often leads to highly competitive rates and terms for qualified veterans.
What are the Key Benefits of a VA Loan? Far and away, the most significant benefit of a VA loan is the borrower’s ability to purchase with no money down. Apart from the government’s UDSA’s Rural Development home loan and Fannie Mae’s Home Path, it’s all but impossible to find a lending option today that provides borrowers with 100 percent financing.
VA loans also come with less stringent underwriting standards and requirements than conventional loans. In fact, about 80 percent of VA borrowers could not have qualified for a conventional loan. These loans also come with no private mortgage insurance (PMI), a monthly expense that conventional borrowers are required to pay unless they put down at least 20 percent of the loan amount.
Competitive interest rates that are routinely lower than conventional rates
- No prepayment penalties
- Sellers can pay up to 6 percent of closing costs and concessions
- Higher allowable debt-to-income ratios than for many other loans
- Streamlined refinancing loans that require no additional underwriting
Conventional Loan Packages
Fixed Rate Mortgage
Fixed-rate mortgages have been the mainstay of the home loan industry for decades. Over the years, loan-to-value ratios have fluctuated and interest rates have moved up and down, but the security a fixed-rate mortgage offers has never lost its appeal.
The word "mortgage" comes from the French. Mort means dead and gage means pledge. It's been argued that if the mortgagor (borrower) did not pay the debt, the property was dead to the owner because the mortgagee (lender) would reclaim the land used as security. If the debt was paid, then the pledge was dead. But those funny, silly French. Who really knows what it originally meant back in the 1500s?
What is a Fixed-Rate Mortgage?
Fixed-rate mortgages allow for repayment of a debt in equal monthly mortgage payments over a specified period of time, from 10 to 50 years. A 30-yearamortization period is most common.
- Payments are credited first to interest, then to principal.
During the early years of the loan, much of the monthly payment goes toward interest.
Toward the end of the loan period, much of the monthly payment goes toward principal.
Yikes, please realize, though, a $200,000 amortized loan at 6% for 30 years means you will pay $231,676 in interest over the life of the loan.
Fixed-Rate Mortgage Benefits
Borrowers gravitate toward fixed-rate mortgages in-lieu-of adjustable-rate mortgages because they like the security of knowing exactly how much they will pay per month for principal and interest.
- The interest rate is fixed, so if overall interest rates increase, it does not affect the fixed-rate borrower.
Likewise, if overall interest rates decrease, the borrower's payment still remains the same unless the borrower chooses to refinance the mortgage into a lower rate.
A borrower can choose to make a larger monthly payment and direct the additional portion of the payment to be paid toward principal, thereby decreasing the principal balance of the loan faster. Paying half your monthly mortgage every two weeks pays off your mortgage in about 22 years. One extra payment per year reduces the amortization period to about 26 years. But additional principal payments are not required.
Should You Pay Points?
You can buy down your mortgage for the first few years by paying a lump sum to the lender. But unless the seller or somebody else is paying this fee for you, it doesn't make much sense to buy down your own mortgage. You can sock away the money in your own savings account and use that money every month, on which you earn interest, to help pay your own mortgage payment.
Points will decrease your interest rate. Each point is equal to 1% of your loan. To recover the cost of those points, figure out the monthly savings with the lower interest rate versus the rate without points. Then divide that number into your points to arrive at the number of months it will take you to break even. Everything after that is gravy.
For example, say you are paying 2 points on a $200,000 loan to get an interest rate of 5% with a payment of $1,074. Or you could get that $200,000 loan at an interest rate of 6% without points and pay $1,200 per month. The difference between the two payments is $126.
Two points will cost $4,000. To recoup that investment, $4,000 divided by 126 equals almost 32 months. By your 33rd month, after almost three years of payments, you will begin to profit from paying those points.
Collection for Taxes and Insurance
If you are considering a loan that is higher than 80% of the purchase price of your new home, you will likely be asked to pay monthly property taxes and homeowners insurance to your lender. Your lender, in turn, will pay the tax assessor and your insurance company. In this case, your monthlyPITI will change from year to year as annual taxes and insurance go up or down.
Lenders will also collect a reserve, from 2 to 8 months of taxes and insurance, in advance from you.
This impound account reserve (sometimes referred to as an escrow account) will increase yourclosing costs.
The reserve amount collected depends on the time of year and when your annual tax bill is due.
Even if you are putting down 20% or more of the purchase price, often lenders will charge "1/4 point to rate," meaning you will pay .25% more in interest NOT to set up an impound account. Personally, I prefer to be responsible for paying my own taxes and insurance.
As a hedge against interest rates falling, lenders who make fixed-rate mortgages will sometimes demand a loan feature known as a prepayment penalty. This means if you pay off the loan within a certain number of years, typically one to five years, you will also pay the lender an additional six months of interest, or more.